22.1.1  Required insurance

The private party must, at its own cost, effect and maintain such insurances throughout the construction and operating periods required by law and insurances of a kind on no less favourable terms than the minimum insurance requirements specified in the project agreement. The private party must also ensure that its sub-contractors effect and maintain appropriate insurances.

Insurance requirements will reflect the degree of risk transfer, the ability of the private party to pay premiums (relative to the size of the risk), value for money considerations and the specifics of the particular project in question. Examples of required insurances during both the construction and operating periods include workers compensation insurance, property/material damage insurance, public/products liability insurance, motor vehicle insurance and professional indemnity insurance.

In certain instances, insurances may be effected by means of the private party's existing group insurance policies, with appropriate care taken that these are extended to adequately cover the required project risks on an individual and aggregate basis.

The project agreement will specify the periods that the private party must maintain the insurances. The project agreement will require periodic reviews of insurances in the operating periods.